If a cash-out refinance rate is higher than your current mortgage rate, compare it with the blended rate of the mortgage plus a second loan before deciding. The blended rate weights each debt by its size.
How to use the Blended Rate Calculator
- Balance 1
- Rate 1
- Balance 2
- Rate 2
- Balance 3
- Rate 3
- Balance 4
- Rate 4
- Balance 5
- Rate 5
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the balance and interest rate of up to five debts.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Balance 1 | Amount in your currency |
| Rate 1 | In % |
| Balance 2 | Amount in your currency |
| Rate 2 | In % |
| Balance 3 | Amount in your currency |
| Rate 3 | In % |
| Balance 4 | Amount in your currency |
| Rate 4 | In % |
| Balance 5 | Amount in your currency |
| Rate 5 | In % |
What each result means
- Total balance = [Balance 1] + [Balance 2] + [Balance 3] + [Balance 4] + [Balance 5]
- Blended interest rate = ([Balance 1]×[Rate 1] + [Balance 2]×[Rate 2] + [Balance 3]×[Rate 3] + [Balance 4]×[Rate 4] + [Balance 5]×[Rate 5])÷[Total balance]
- Yearly interest (simple) = ([Balance 1]×[Rate 1] + [Balance 2]×[Rate 2] + [Balance 3]×[Rate 3] + [Balance 4]×[Rate 4] + [Balance 5]×[Rate 5])÷100
Example values
How the main result changes when Balance 1 changes and everything else stays at the example values above:
| Balance 1 | Blended interest rate (%) |
|---|---|
| 150,000 | 4.75 |
| 225,000 | 4.409 |
| 300,000 | 4.214 |
| 375,000 | 4.088 |
| 450,000 | 4 |
| 600,000 | 3.885 |
Formula
Blended rate = Σ (balance × rate) ÷ Σ balancesWorked example
Inputs — Balance 1: $300,000; Rate 1: 3.5 %; Balance 2: $50,000; Rate 2: 8.5 %; Balance 3: $0; Rate 3: 0 %; Balance 4: $0; Rate 4: 0 %; Balance 5: $0; Rate 5: 0 %.
Results — Total balance = $350,000.00; Blended interest rate = 4.214 %; Yearly interest (simple) = $14,750.00.
Frequently asked questions
What is a blended interest rate?
The balance-weighted average rate of several debts.
When is it useful?
When comparing a refinance or consolidation loan with your existing debts.
Is it the same as a simple average?
No – larger balances count more.
What formula does the Blended Rate Calculator use?
Blended rate = Σ (balance × rate) ÷ Σ balances.